Should You Move For a Job?

January 23, 2017

Have you received an interesting offer to live and work somewhere else? Moving to a new city can be very stressful, especially if it involves changing jobs or re-locating with an existing employer. While this stress can be heavy on the person dealing with the job change or transfer, it can also affect others.

Before you accept the move and start plotting your appearance on HGTV’s House Hunters, you and your family will have to work through some tricky decisions. That’s the scenario my fellow planner Brian Kelly, CFP® was discussing with an employee on our Financial Helpline recently. Here’s what he had to say:

1. Don’t base your decision solely on the new salary. Think about how far your income will go in the new city. If you are moving to a place where the cost of living is much higher, you might have to eventually answer this question: “Is the location worth it?” The answer to this question might just be “yes, it is worth it to live in a smaller house near the ocean or have to spend more in a town that has more amenities,” but this is a trade-off that you should be aware of. You will also want to consider new expenses you are not currently budgeting for such as traveling to visit family and babysitters.

2. Calculate your net pay after benefits. Employee benefits are now a large part of a person’s compensation. Taking a new job with a salary increase but weaker benefits can actually decrease your total compensation so factor these in. See this guide for calculating the value of your benefits.

3. Consider your spouse’s career too. Think about this in a longer term perspective. In 5 years, is our “team” going to be better off?

4. How does the move affect your children? Moving children can have effects on their education, their relationships and possibly their well being. Do some research on school systems and after-school care. This might impact your decision on where to buy or rent.

5. How does it affect your parents? Some grandparents’ retirement plans center around time with their children and grandchildren. Others will need elderly care. You might need an extra bedroom in your new home.

6. Should you purchase a home right away or is it wise to rent for a certain time period? Purchasing a home is a major financial decision. The closing costs alone can make a short-term home buying decision a bad one if you have to sell before the house appreciates in value.

7. Lastly, you have to consider the real possibility that it doesn’t work out, for whatever reason, and have a plan B. Companies fail, managers can be impossible to work with, the job doesn’t turn out how you thought it would, parents get sick, or you just miss home. In that case, have a backup plan.

Checklist of things to do:

Create a side-by-side budget with current and new income and expenses. Factor in cost-of-living and benefit changes.
Have a family meeting with spouse, children and/or parents to discuss how the potential move will affect them.
Visit before you make the final decision. See the new work facility, meet and interview people you will work with and check out schools and areas where you might want to live.
Research school districts and after-care if necessary.
Compare the costs of renting and buying a home. Consider renting, even if it’s temporary, until you are sure of where you want to live.
Articulate a plan B just in case.

Once you’ve worked through the action steps, the wisdom of one path vs. another should be more clear. What does your head tell you? Your heart? The balance of both will help you make the best decision for you and your family.

Do you have a question you’d like answered on the blog? Please email me at [email protected]. You can follow me on the blog by signing up here, and on Twitter @cynthiameyer_FF.

What a Financial Planner Told His Daughter After Her First Job

December 30, 2016

This week, I’m sharing a blog post from my colleague, Steve White:

My daughter is 22 and recently graduated college with a degree in human biology cum laude no less and she has a job working with a medical practice. (I’m a dad so I have to brag a little.) She has done several things that have reminded me why 1) being able to support yourself is important and 2) your kids do listen to what you say.

She called me when she got her first paycheck and said “Dad, I got a paycheck with a comma in it. Now you have to listen to me.” My father used to jokingly tell me that until I got a job with a paycheck, he didn’t have to listen to me, and yes, I jokingly told her the same (full disclosure – my dad did listen to me and I did and still do listen to my daughter). That paycheck with a comma in it meant that she now got to experience adult things that I’ve taken for granted like employee benefits. Her questions (and my answers) that we covered when she accepted her job included:

What health insurance do I sign up for? (the one that fits your situation) Should I check and see which one covers my prescriptions? (yes) If I take the high deductible plan, should I put money into the HSA? (yes) If I take the other plan, should I put money into the FSA? (yes)

How much life insurance should I get? (enough to cover your debt – see this life insurance needs worksheet) Who do I name as beneficiary? (whomever you want to – not me, name your mom) Wow, I don’t like thinking about if I die (Yeah, I know.)

Who is your beneficiary? (Mom) You need to name me as your medical power of attorney [see human biology major – cum laude] (I’ll think about it – aka no, let’s get back to your benefits.)

How do I fill out a W4? (What do the instructions say?) Will I have to file my own taxes? (yes) Can you help? (yes)

Thanks Daddy! (You’re welcome. What other benefit questions do you have?)

Do I need disability insurance? (yes) Why? (You’re statistically more likely to be disabled than die young – 24% chance of being disabled for 3 months or longer.)

Before she got her 3rd paycheck, she called me about budgeting, here’s how that one went:

Dad, I think I’m going to run out of money before I get paid again. (Oh, why is that?) I’ve got $23.42 in my bank account. (Yeah, I’d say that’s a possibility.)

I hate budgeting. (We all do sweetie.) Can you help me set up a budget? (Sure, I do it every day. That is one of the things I’m paid to do.)

(You remember when I decided to start watching what I ate?) Yeah, I remember you arguing with me about how many calories are in a fried pork chop. (Okay, besides that, when I thought about watching what I ate as a diet, I thought about in a negative light. I decided to think about it as an eating plan. That feels positive to me.)

Oh, I get it. I need to think about budgeting as a spending plan. (Yeah, just like you plan what you are going to eat, plan what you are going to spend.) Can you send me that spreadsheet thing you sent me before? (sure: Easy Spending Plan)

When she got her 3rd paycheck, our conversation went like this:

Dad, this morning at work, I was so excited that I got paid that I gave everyone a hug. (That’s nice.) I don’t think they expected that. (They have gotten a lot more paychecks. They have learned to restrain their excitement.)

I’m working on my spending plan and I’ve got a question. How much should I spend on lattes? (less than you do now) But I really like my soy double pump vanilla latte (I know), so what do I do? (Spend less on something else.)

But I need gas and food! (I know.) Dad – sometimes being an adult stinks. (I know.)

(Love ya sweetie.) Love you too Dad.

Don’t Leave Any Money On The Way Out

October 06, 2015

I was recently talking to a dear friend of mine who just lost her job due to a layoff. She was shell-shocked, scared and not sure what to do. As I listened to her talk about her plan, I asked her about her workplace benefits and she said that she got the package, saw no value in anything she had and was getting ready to throw the package away. Continue reading “Don’t Leave Any Money On The Way Out”